Politics, Moderate



Americans have healthier hearts. We have a healthier budget, too.

Catherine Rampell on

Thanks to preventive medicine, older Americans have healthier hearts. Which also means, incidentally, that federal budgets are healthier, too.

At the turn of the millennium, health-spending growth was spiraling out of control. Economists projected that the already ginormous health care sector would soon gobble up monster portions of the federal budget and the entire economy. But something strange happened over the past decade and a half.

Rather than rocketing upward at ludicrous speed, health-spending growth slowed -- dramatically so.

That's true whether we're talking about public- or private-sector health spending; for Medicare, Medicaid, private insurance and out-of-pocket spending, annual outlays have been way lower than the doomsday forecasters anticipated. Curiously, too, the sharpest slowdown has occurred with Medicare.

In fact, about three-quarters of the health-spending slowdown nationwide was due to slow-as-an-(almost)-trickle growth in spending on the elderly. From 1992 to 2004, per-capita spending among Medicare beneficiaries grew by 3.8 percent each year, adjusted for economy-wide inflation; since 2005, the rate has been a mere 1.1 percent, according to a new Health Affairs study.

In plain English, that means total spending per elderly person hasn't fallen, per se, but we're spending thousands of dollars less today than was projected to be the case back in the early 2000s.


So who gets credit?

Some have attributed the spending slowdown to lousy economic conditions, although in retrospect the timing isn't exactly right. The deceleration appears to have begun before the Great Recession, and it continued long after it ended.

Some have credited structural changes to the health care system, including some of Obamacare's cost-control measures. Maybe bundled payments and accountable care organizations are responsible -- though studies so far suggest their effects have been modest compared with the magnitude of the overall changes in health-spending trends. What's more, the slowdown pre-dates Obamacare.

That new study suggests a different cause: Americans taking better care of their hearts.


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